On Second viewing not a ghost story at all...
On second viewing it seems clear that the children's behavior, knowing that they were orphaned, and were sexualized at a young age, and had a governess also die on them, and the gardener die, and were precocious as a result, it is clear that their behavior is understandable. It is clear that Flora expected Miles to get kicked out of school and reunite with her. It is clear that an experienced, stable, insightful, capable governess would have understood them.
Very early on Miss Giddens is hypersensitive to sounds, gets unhinged at the sound of birds, flies and wind and even laughter, when Miles rode the Horse at the beginning and she gets scared and hears birds shriek is the scene where her madness escalates, she cannot sleep well from the beginning, she is constantly frightened, she only sees the face of the man peering in the window after she sees a picture of him in the music box.
It also becomes clear with every scene that Miss Giddens is mentally unstable, as well as repressed, and she becomes increasingly unbalanced as she enters this new environment. Every scene shows how inappropriate her reactions to her surroundings, events, and the children are. Yet, All of the movie is from her point of view, so you are drawn to see it from her perspective, BUT if you look closely, you can see that the children's behavior is understandable but her reactions and thoughts and behavior is unhinged. The HOUSEKEEPER is a key figure because she keeps giving her information about Qint and the previous governess that fuels her fears and imagination. Her psychological makeup combined with the fact that the children are NOT innocent in the least drive her further and further over the edge of insanity. She needs them to be innocent as she has a compulsion to be herself and have all children be, and when they are not it feeds her madness
It is Miss Giddens who is the Child innocent- her psyche has become stuck in that mode due to her childhood where her father, a preacher demanded silence, as she told Flora. Indeed when Miles asks about the home she came from, she does not refer to her home she just left as an adult, but rather her childhood home. if you view the movie a second time you seeing Miss Giddens as the mad child innocent and the children as precocious victims of their horrid childhood.
If she had only gone to the uncle as she initially planned to tell him everything, then she would have been fired and all would have been well. But then she said they were possessed and "couldn't be let out of her sight" and only told the housekeeper, who, because of her position and station couldn't argue with Miss Giddens. The fact that she did not go to the vicor or the Uncle shows she was mad.
I do not believe there are any ghosts at all.